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No. 681 - COLLAPSE OF THE INSURANCE INDUSTRY

No. 681

Jim Davidson -- NEWSPAPER COLUMN

COLLAPSE OF THE INSURANCE INDUSTRY

After you read my column today you may be saying to yourself, “Oh, no! Not again.” Every American has been impacted in one way or another by the financial crisis created by greed that has sent our nation reeling, and the effects will continue for a long time into the future. In view of these circumstances, I hesitated for a moment to share the following information, but if there are more serious problems on the horizon we need to know about them and take steps to solve them.
What I am talking about is the potential collapse of the insurance industry. The following thoughts are shared in response to a press release that I received from Eric D. Gerst a few weeks ago. Mr. Gerst lives in Newton Square, Pa., and has worked as an attorney and legal consultant for the insurance industry for more than 30 years.
He is the author of a new book titled “Vulture Culture,” which does not sound too appealing, but nonetheless is an apt description of the business climate that has or will bring us to our knees. The first few lines of the release, which is the subtitle, present a good synopsis of what it contains: Dirty Deals, Unpaid Claims, and the Coming Collapse of the Insurance Industry - A Hard-Hitting Expose of a Problem-Plagued Industry and a Compelling Case for Federal Regulation. For those of us who are not part of the insurance industry and do not dwell on this topic, what I am saying may be of little interest, but if you are part of the 257 million Americans who have at least some insurance, it does affect you.
You may rest assured those who live on the Gulf Coast and lived through the complete devastation of Hurricane Katrina know a lot more about insurance than they thought they would ever need to know. But back to some of the points presented in the book “Vulture Culture.” As most of us know, there are 47 million Americans living without health insurance, a fact brought out by the raging political debates leading up the 2008 election. However, less familiar but just as serious, are the risks of 257 million Americans who have invested their money and faith in health, home, life, auto, business or other insurance.
Ask anyone who has been denied coverage for a critical surgical procedure. As already mentioned, ask the hundreds of thousands of homeowners devastated by Hurricane Katrina and unpaid claims. Forget peace of mind. For the majority of insured Americans, the insurance industry promises emotional turmoil and financial peril. According to author and attorney Eric Gerst, “The insurance system, as it exists, offers no reliable protection.” After decades of representing clients in the insurance business, he began to question his belief in the benefits of insurance when his trusted carrier inexplicably turned down a legitimate claim.
After considerable research, he uncovered a treacherous trio: rampant fraud and corruption among insurance businesses; 50 separate state fiefdoms with unequal, frequently clashing regulations; and a glaring lack of oversight or intervention by the federal government. In his book “Vulture Culture,” Gerst reveals how a once respected industry got to such a shameful, precarious state. Filled with candid interviews, Bid-rigging, secret payoffs, deceptive accounting, fraudulent sales and marketing tactics, and other unscrupulous practices conducted by well known, top-of-the-line brokers and insurers.
Not a pretty picture, but it’s better to know than not to know, wouldn’t you say? “Vulture Culture” is really a call to action to clean up the industry before it’s too late.
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(EDITOR'S NOTE: Jim Davidson is a public speaker and syndicated columnist. You may contact him at 2 Bentley Drive, Conway, AR 72034. To support literacy, buy his book: “Learning, Earning & Giving Back.”)